Friday, October 10, 2014

OK, so a bit of background - Ariel Rebel is Canada's greatest internet celebrity of the past 10 years. I'm her biggest fan so I say so.

She's also from Quebec.

So for some reason she's now doing videos on cooking with Pat Le Chef, and I just happened to stumble across these videos while not actually looking for Ariel Rebel at all, especially not videos of her on Youtube.

So I decided to share a few with you, to help instruct you in the finer points of Canadian culture, and also to freak out those of you who might have thought you knew what French sounded like.

The moutarde is also interesting, I'd never have thought of using moutarde.

And now for something really weird, pogos de cornflakes:

Hearing ingredients like "saucisses hot-dog" et "une tasse de cereale cornflakes" tossed around willy-nilly might really start hurting your brain, which is why we can be thankful that we can also check out Ariel's cute ass in this one.

There are probably other Pat Le Chef videos where Ariel's naked, but you'd never want to see that.

Well, I was watching til the end of the day, and there was a big surge in fear in the last few minutes, so let's see what people will be staring at all weekend.

That's a big backwardation there! October is at May levels. I thought maybe we'd get to Jan levels only.

Then again, I only ever started following the term structure in the past couple years, so I have no idea what serious fear looks like.

$VIX:$VXV is >1, which I guess is another heuristic to very roughly approximate the backwardness of the term structure.

All along I'd suspected this drop would break the downward trend in the weekly candles. I was kinda hoping for 22, but heck maybe we can get to 30 or 40?

Then again, when's the last time $VIX got to 50% above its EMA(10)?

Then again, it probably did back before 2012, which is as far back as this chart goes. Maybe we just haven't had enough panty-piddling over the past 3 years for this chart to be giving me a sufficient dataset to form an opinion with.

I mean, if you've got Wall Street clowns whining about a 5% drop in the S&P 500, then maybe what we need is a 15-20% drop before things can get good again?

So I dunno. I'm agnostic on everything and just want to see the market continue crashing, like I said, til next Thursday.

Though if $VIX could somehow pop to 30 or 40 on Tuesday, I'll still short it cos I'm kind of a dumbass that way.

And always in the back of my mind is the pondering about how maybe this is the market paying back all those who thought it was clever to short the $VIX. Because frankly there's no other fundamental reason for it to go down.

Oh, and

Junk bonds are in no fundamental trouble whatsoever, but don't let that stop you from puking them, Whitey. I mean, as long as you keep freaking out the robots making all the trades, that's fine by me, I've got lots of cash at the ready for when the bottom hits.

Vix term structure on the near end has become inverted, which means people are more scared of the present and near future than they are of the farther future.

And since XIV operates by rolling over futures on the first few months, you'll lose money every day if you hold XIV while this is happening, even if VIX calms down.

I play the short VIX position using HVI on the TSX, and Monday is a holiday here in Canada, so I can't play this right now anyway because short VIX is not a play you can just go on holiday from. It's a day-trader's move only.

Then Wednesday I'm going to be at a site visit for at least part of the day, with no computer, so I doubt I should play it then either.

So I'd be very happy if Wall Street Whitey can keep the fear and dread going til at least Thursday please. Hey, an intraday $VIX of 30 or 40 would really tickle my fancy - then I could short it like the fist of an angry god. Keep on barfin', guys!

And now, people can't think of any "upside catalysts," and everyone thinks the markets are going lower.

What's interesting is that there's no obvious change of stories. Sure China is slowing, and the European economy is belly flopping. But so? How is that news? It's not.

A rare moment of serious reportage from Joey the Weasel. Is BI going bankrupt or something?

But as for the whole "har har, everyone was bullish a month ago and now look!" angle, I just have to shake my head. What, the market goes down 5%, and all of a sudden Rosenberg's secular bull market thesis has been disproven?

Don't be an asshat. A one-week move does not disprove a prediction about the next five years. If you yourself have been asserting forever that the market is "overdue for a correction", then here you go, here's your correction. Don't extrapolate today's price action into the far future.

Reuters - Chinese gold buying picks up, Indian premiums rise. Welcome to Dhanteras, Diwali, and Indian wedding season, a time when 1.25 billion Indians don't consume any significant amount of gold whatsoever according to some white-ass honkey in New York City. Quote:

Demand has also been increasing in India, the second biggest consumer, helped by the festival and wedding season.

Indian gold premium increased to $12-$15 an ounce this week from $7 two weeks ago, dealers said.

This month, India will celebrate the festivals of Dhanteras and Diwali and both are considered auspicious times for buying gold jewellery, coins or bars.

Since the wedding season also kicks off around the same time, markets expect strong purchases. Gifts of gold are an important part of Indian weddings.

"Gold demand in the physical market has increased and is likely to remain firm until early next year because of festivals and the wedding season. Gold jewellery remains in demand during the marriage season as it is mandatory for Indian households to gift gold," said Yash Zaveri, director of retailer Zaveri & Co.

(Reporting by A. Ananthalakshmi in Singapore and Meenakshi Sharma in Mumbai; Editing by Anupama Dwivedi)

Do you think that perhaps people with names like A. Ananthalakshmi, Meenakshi Sharma, and Anupama Dwivedi might know more about gold than Wall Street Whitey? Hm? Or is it racist of me to make such an assumption?

Pharmasave Dave - OMG the S&P is going to crash! I used to wonder "who is this Danielle Park person showing up at goldbug conferences", remember? OK, now I know who Danielle Park is, and I know I can ignore her from now on.

BTG is marching back up, finally. I felt a little dumb yesterday having bought $10K worth at the Wed top, but feel better now. The past 3 days show a governing EMA breakout, a governight EMA retest, and now a march back up.

Maybe I'll buy more.

Rio is also marching back up strongly.

However my other faves Premier, Asanko, DPM and Silvercrest are still doing nothing that would inspire me to buy them right now. So I guess this is a very choosy rebound.

Oh, also, there's a few weeks before Nov comex settlement, so we might be in one of those week-long safe zones.

Indeed, the chart of the CRB Index below shows that it is testing support and starting to move off an oversold reading. These conditions are classic setups for a commodity rally.

As well, the price of gold is also showing a similar pattern of a successful test of support and an upturn in the 14-week RSI.

Kinda seems like he's ringing a bell here. Let's see how his prediction goes.

After all, I just finished reading a blog post from a certain swarthy gentleman of our acquaintance, who pointed out that the Shanghai exchange's continued strength is putting the lie to the idea that Chinese resource demand should be going down.

in the aftermath of the Great Recession, every time the economy appeared to pick up steam, gasoline prices would rocket toward $4 a gallon. This slowed the economy down, as a result of which gas prices would fall, starting the cycle again. In other words, gas prices acted as a governor regulating the speed of the economy. Or, like a choke collar.

Now read this:

If the US economy breaks free of the Oil choke collar, even for a year or two, we can expect an acceleration of growth, consumption, and jobs.

He's hedging this, but I think that's only cos he's agnostic on the idea of a secular bear in commodities. But even still, reduction in gas prices will improve consumer spending and improve corporate earnings ex oils. So therefore, OMG sell US equities!

Kruggers - the deficit is down and nobody cares. Hey, I just remembered that a certain individual of my acquaintance was predicting just 2 years ago that USTs would collapse and rates would go sky high. Something along the lines of "there is no way the US will be able to roll over all this debt". I guess that person doesn't know anything about Krugman's liquidity trap idea, and thus his economic predictions are meaningless. I wonder if he'll ever explicitly admit how wrong he was, or if he'll just keep putting off his prediction.

BI - Russian economy is collapsing. Well, it's from Slate, so don't expect the article to be anything more than propaganda. Still, how the heck is Pooty-Poot supposed to finance his country with oil prices dropping?

Reuters - gold went up yesterday. Yup, and meanwhile GLD continues its outflows - another 5 tons on Wednesday. Good, I say.

Asia One - solve a puzzle in a book, win $500,000 in gold. Why gold, and not dollars? Is this illustrative of some special, magical value attached to gold beyond what the next fool will pay for it? Why didn't he offer to give away $500,000 in zinc, or USTs, or shares in Exxon Mobil, or US farmland?

Now. What to do today? I just finished a week of mocking PMs and juniors, so why all of a sudden should I buy them? Especially if I think the S&P has bottomed and I can make an easy 20% from today onward just by shorting $VIX (which may turn out to be wrong, sure, but right now I think the balance of probabilities is in my favour).

First of all, let's clarify. I don't want to buy GDXJ. I'm looking at (US tickers for all) RIOM or BTG - or hey, maybe SVLC or FSM if silver is also done collapsing.

Now, these stocks did pop yesterday afternoon, but I really do suspect it was just short-covering.

The market was probably strongly short junior miners, in the belief that gold was going to collapse to $1050 by end of year. And sure, that really is a good poisition to take as long as your thesis is correct.

I think the thesis was wrong, btw, because gold has not broken down: rather, US dollars went up in price. Gold in ex-USD has stayed in a 5% range for the past month, and a 10% range for the past 4 months:

So if Wall Street Whitey was short miners in the past month, he was short based on typical American ignorance of the price of gold and the existence of the outside world. No surprise there.

In fact, he was also short miners because he was extrapolating a very vigourous upmove in USD: but it is utterly stupid to believe the USD can appreciate forever at a rate of 10% per quarter as it has done.

Currencies don't move that fast. It's the same as a Shinzo Abe pop in the Nikkei, or the more recent Modi pop in the Nifty: too much too soon, and even if the thesis turns out to be right, the first derivative of the price move was still bullshit.

But see, according to the last candle on that chart above, gold also did nothing yesterday. The USD went down. That's all.

So fine. Then WSW covered his shorts after 2PM, and that caused a big pop because the order book was too thin to meet all the covering volume.

So I don't want to buy at the open, for sure: the buying met insufficient sell volume because (again) the first derivative was bullshit. That sell volume could come back over the next few days, giving us a better opportunity to get back in.

Unless, of course, the market suddenly begins to doubt that gold is going down anymore.

After all, for the junior prices to come back down, sellers need to come back in. But who's going to sell now that they see that their stocks are undervalued at these prices?

So gold needs to keep going up.

See, the problem here is that I am trying to convince myself not to use TA.

The fact is, I have a buy signal in BTG right now. Here's its chart:

BTG crossed above its downtrend-governing EMA(12). It did so on massive volume. In one single day the EMA switched to a positive slope.

In doing so it printed a candle that canceled out an entire month of downward price action, which made about 50-70 million shares worth of sellers feel really stupid. That means that remaining shareholders are not going to want to make the mistake the old sellers made.

OK, that's not TA, that's psychology: but TA is supposed to capture psychology, that's the reason to use it. The candles are nothing more than a representation of the actions and attitudes of buyers and sellers.

But dayum. I look at the BTG chart, at those features I just listed above, and am kicking myself that I was watching VIX yesterday and utterly ignoring the moves in GLD and GDXJ - even though I had them on my screen, I didn't even glance at them once.

Basically, that chart gave a big fat buy signal yesterday, so I am going to have to think long and hard about whether to buy a junior today. Cuz if the market's attitude re gold price and the future of mining profits have changed, then early adoption will make me money.

And the attitude has changed because the chart has given a buy signal by my criteria.

I could wait around today to see confirmation, of course.

We'll see.

Disclosure: no position as of yet, I am not a licensed financial advisor, you'd have to be a retard to buy stocks based on what someone writes on a blog.

I guess they figgered gold was going to that stupid Goldman target of $1050, so they all piled in short, and now they gotta cancel out. Pretty weak conviction among the shorts, eh?

And here's the juniors:

Again, massive volume, again the governing downward EMA was broken.

Try and explain to me, by the way, how some bullshit FOMC statement that they understand the downside risks to tapering is supposed to have any effect on gold demand whatsoever. Go ahead.

And BTG popped like a bat out of hell. From -2SD to +2SD just like that.

I dunno... look, this move happened at 2PM, so there was 2 hours of minimal liquidity available to cancel shorts, if that was what people were doing. So I want to see follow-through in the next few days, instead of longs taking the pop as an excuse to sell.

But if last week's gold price breakdown was a fakeout, if the break only happened because a bunch of fairweather shorts piled in last week and got the fuck back out this afternoon, then this could run the other way really fucking fast. From false moves come fast moves.

Boy is that dumbass Ritholtz really going to be fucking embarrassed, eh?

Disclosure: nothing really because I just got finished making fun of junior miners all week.

New Deal Demoncrat - on hours, jobs and wages. Some stats for you to ponder. Also note gasoline might be slipping into a long-term bear market.

Ritholtz - signs of a bull market turning bear. You dumb fat asshole! You just bottom ticked a 5% retrace with a sell call! Seriously, you fucked up, Barry, and it might be partially because you're listening to that fucking clown Doug Kass.

FT beyond brics - EM growth will disappoint for 5 years. Then again, the problem is that we're in a liquidity trap: so should we expect EMs to get crippled by negative flows? I mean, what if the UST10 stays at 2% yield for the next ten years: that shouldn't cause your usual EM bear market, should it? I dunno, I'm stuck here.

FT Alphaville - there is no corporate bond liquidity problem. Don't bother reading it - the reason I'm linking to it is to note that someone must obviously be thinking there is a corporate bond liquidity problem, and thus HYG getting puked.

International jewry (Ritholtz and Weisenthal) have to keep up their clicks or else they'll be forced to get real jobs, so they like to continually frighten you with assertions that the next big correction is right around the corner. It's great for clicks.

So let me show you this:

Those are the only four bull market S&P corrections that have happened in the last 40 years. Four of them.

Bull market corrections are rare, so don't listen to Ritholtz and the Weasel when they go on their monthly tirade about how the next one is just around the corner.

FT Alphaville - why does the IMF constantly get everything wrong? If they were to ask Krugman, he'd be able to explain it quickly: the IMF are fucking right-wing neocon "sadomonetarist" clowns who have no fucking clue about economics. Ignore the IMF, they're no experts in anything.

IKN - mining costs dropping in Chile. Again, that's what happens in EMs in an EM/commodity bear market. Now run those costs through the currency converter to see what's happening to them in USD terms. Do you believe Jim Rogers yet?

Climateer - again with the Ned Davis crap. And yeah, guy, I do know you forecasted $875 gold by end Q4, and I've got a post scheduled already that will mock you on that fateful day. Because it's not fucking happening and I'll bet you some shiny gold coins if you've got the balls to stand by your call.

By the way, check out this chart:

The gold chart only sucks to Americans; for the rest of the world, it's simply bottoming. So please 'splain, Wall Street Whitey, why any of us non-Americans should worry there's a breakdown in the gold price? For example:

it's not really bothering me much, being Canadian and all. Chart's a little bit more iffy, but the market really doesn't know what to do with the Loonie much of the time.

In fact, if I had my money in a collapsing EM currency, gold would seem a nice kind of... what's the word? Insurance? Y'know, the kind of thing that pays no yield and has a carrying cost?

Yeah, you could use US dollars for the same purpose. Then again, maybe you're living in one of the EMs that imposes currency controls whenever things don't go their way.

Always remember that there are other countries in the world, and they also have wealth to invest.

For all the cockpunches IKN has given Fortuna over the past couple years, the fact is that its stock price has still appreciated versus the price of silver. That's not bad, really, considering.

Now, a certain person who reads my blog is advised to chart a certain other silver miner against the price of silver. Because he or she will see that that other silver miner has presently dropped to a multi-year low versus silver, and dammit dude I'm sure I told you that you shouldn't take a position until you're sure it's finished going down.

Really, people. You're not even trying. If you want to baldly rip off content from a blog that uses statcounter to track traffic, you will need to surf to it with a script blocker.

I mean seriously. I know when Barry Ritholtz reads me on the Long Island train ride home. I know when Bobby Genovese reads me in his Miami Beach penthouse. I know when the OSC reads me in the rub & tug down the street from their rat-infested one-room office.

I know their operating systems and their screen resolutions and their browsers and how they came to my page and whether they like animated kitten gifs or pics of Mila Kunis in her underwear.

Or both, of course. It's usually both. If they have any taste.

And all us bloggers do the same thing. We do it because we're paranoid and we like stalking people and you generally would never want to meet any of us in person even if you could be assured it was those 5 minutes of the day when we are unfortunately not drunk.

So wise the fuck up.

You should be running a script blocker anyway. Letting scripts run without examining them is a surefire way to get your ass hax0rd. And don't think your office's free AVG is going to protect you.

2. I'm agnostic on the gold chart. As said below, and to be clear, I will buy junior miners when gold goes up again. I don't believe in anything that's going down.

3. But I do own bullion. And I do rub it against my body to pleasure myself, just as ancient forgotten kings did millennia ago. And I hoard canned goods and have a bugout bag too. But nobody will let me have a gun. Literally. I've asked people to go to the reserve and buy me some guns, and nope! It's like they don't want me to protect myself or something.

Anyway, in sum, I did not write this to take the side of rabid goldbug true-believers. I don't like them. They're either Nazi fundie fruitcakes, or people living in a perverted fantasy world.

I wrote this because while Ritholtz could have posted an informative and empirically valid article to frighten goldbugs, he instead simply reblogged a big stinking turd that he stole from a technical analyst, and in doing so committed the psychological errors that he himself loves warning people about.

"Technical analysis" is bad enough, Barry. But using "technical analysis" to beat up on the retarded? Beat up on my retarded stepbrothers and... well, I don't care about them, actually. But in the neighbourhood where I come from it still gives me the right to beat up on you. And I think you're fat and slow and a panty-piddler, and I could take you.

Gold is one of those topics that always generates fierce pushback whenever I write about it. Yesterday’s column How Low Can Gold Go? was no different. A deluge of emails and over 150 comments soon followed.

I may post some of the more informative, vociferous and misguided comments / emails from readers later today as a public service to everyone else.

That must mean me, right? I mean, I'm informative, vociferous and misguided, ain't I? Or do I need to kick it up a notch?

Anyway, in the rest of the article he mentions Ned Davis' downside target of $660 for gold, and in doing so commits a couple of those psychological errors he's so fond of supposedly learning from. Let me point them out.

First, here's a quote from Ned Davis that he reprints:

“[F]rom its peak in January 1980 through its trough in February of 1985, gold suffered 65.8% losses. So far in this cycle, it’s lost 35.7% from its August 2011 peak, so if it were to follow its 1980s path, it could easily slip below $700 an ounce.

Oh good, argument from analogy. Why is this gold drop supposed to be an analogue of the 1980-85 gold drop? This thing is not like that thing, Barry. You're drawing a false equivalency from a dataset of two gold drops, one of which (maybe) isn't done yet.

Now, I'm a bit of a weirdo, in that while most goldbugs insist that "gold is real money" and the US has "devalued the dollar against gold", I do the opposite and hold that the pre-Nixon dollar peg was actually a price control on gold.

(In other words, before the Nixon Shock, the dollar was not "pegged at one thirty-fifth of a troy ounce of gold". That's bullshit, it's stupid, it's meaningless. In reality, a troy ounce of gold was pegged at a recognized price of $35. When you flip it around, it's obvious there was an official price control on gold. That's my opinion, anyway.)

So, the 1980s gold price spike happened as a result of the earlier US price control on gold being lifted. And the subsequent trend down was the reversion to mean as supply & demand re-established equilibrium.

Nothing like that has happened since the Brown Bottom of 2002. Thus, this time is not like that time, because its starting points are qualitatively different.

Also, back then you could only buy futures or paper. Since the 2000s we've been able to buy gold in ETF form. That also could be expected to change how the market responds to price movements. The 1980s peak should have been higher, and the 1980s selloff should have been slower.

So, generally, comparing this time to last time is completely unjustified and uninformative. Ned can't even start the argument with "if we assume that this time is like last time", because it's not.

Next:

Feel free to take the other side of the trade from what is widely regarded as the most astute technical analysis firm in the world . . .

And what happens if Ned has drawn a false analogy from a dataset of two? Are they still the most ass-toot TA firm in the world now? Or can we ignore them from now on?

Actually, come to think of it they might still be the most astute TAs, even after throwing basic empiricism out the window. After all, most TAs pull stuff out their asses with insufficient or nonexistent justification, don't they? Regularly, with impunity, right? I mean, just because it sounds clever, right? Or just to fill space in their mailer, right?

Anyway, here's more Ned:

It is oversold, but is trending poorly. Like gold, the overall commodity super-cycle looks to be dying.”

Yup, it's trending poorly. I won't argue with the charts, and thus I'm a goldbug watching from the sidelines til gold no longer sucks. May take a year or a decade, but it's easy to watch when you're not in.

And hey, I won't even argue against the possibility of $660 gold. If EM currencies collapse, then mining labour costs will go down; if fuel prices collapse, then mining power costs go down. Countries that rely on mining income for forex might subsidize the industry, bringing mining costs down. Efficiencies can be found in the industry. That's just what happens in secular EM/commodity bear markets, right?

And hell, when junior miners have the odd 25% pop in this bear market, like we saw in June, I can still make money off them. I know how, and I still follow that chart every day. So I'm not complaining.

And yup, the overall commodity super-cycle looks to be dying. But per Jim Rogers, who is widely regarded as the most astute commodity trader in the world*, that must mean that we're in a secular bull market in the US for the next 10-15 years or so, Barry.

Which means you should just buy the damn SPY for your clients, and quit piddling your frilly pink girl-panties every time there's a goddamn 3% pullback.

Monday, October 6, 2014

Four things for you tonight, then it's off to listen to electropop. Freaks me out, a lot of good stuff is going top-ten these past couple years.

I've found the music charts sure are one hell of a lot better than they were in the 90s - probably because the payola-and-promotion system has utterly collapsed. Now the people are choosing their favourite music based on what they like on YouTube, not based on the 40 pieces of crap they used to be force-fed on the radio; and guess what?

People actually have musical taste.

No really, they do.

So instead of they typical 90s situation where you had a dozen talentless rip-offs of Mariah Carey and a dozen talentless rip-offs of Matchbox Twenty choking up the charts, you've got some really good stuff showing up there nowadays. And if some star like Lady Gaga or Avril Lavigne gets fat and lazy, her record sales collapse instantly and she's shipped off to the glue factory within a week, instead of sticking around for another five albums of desperately-promoted garbage like it used to be.

New Deal Demoncrat - more deceleration in weekly indicators. Nothing severe though. I think NDD's turning into a bit of a pussy. BTW NDD, since when has Gallup's consumer spending data been useful? I think you can drop that indicator.

Bloomberg - has the market selloff run its course? Well, not today it didn't. It's a fun article if only for the fact the charts have literally been drawn in crayon - take that, TAs! Other than that, I react with suspicion to the idea you can predict the upcoming moves by looking at a single year of put-call ratio and %-under-EMA(20): you'd have to assume this market is the continuation of the last year, which it might not be. Certainly the USD move is nothing like what we've seen over the past year.

Rather, if you are upside down in gold -- or any other investment for that matter -- you should be asking yourself the following questions:

1. Why did I make this investment? Is the underlying thesis still valid?

2. What will trigger unwinding this trade? What is my risk management for this position?

3. Am I wrong?

These questions address three key aspects of anyone’s approach to investing: Why a trade was put on, how and when that trade should come off and the trader’s own psychology as it relates to that holding. Note this applies to any position, investment, asset class or approach to deploying capital.

Everyone should do this with every position. It means the difference between a 5% loss and an 80% loss.

The only people with any significant number of bitcoins right now are drug-dealers, script kiddies and child pornographers. In other words, Russians.

If they all dump their bitcoins, the price collapses because nobody wants it.

As it turns into more and more of a disaster, more and more people will sell it and it goes to $0. Because it has no value whatsoever beside what the next clown is willing to pay for it in order to buy more drugs, hacked credit card numbers, or pr0n.

Art Cashin says you should sell Rosh Hashanah and buy Yom Kippur, because I guess he feels that observant Jews are still supposed to be powerful enough to influence the stock market somehow, demographics be damned.

I'm writing this post after Rosh Hashanah, with the S&P weak, IWM collapsing -2SD, and $VIX in an upward trend.

This post is scheduled to get pubelished* on the first Monday after Yom Kippur. Let's see if the market starts rebounding after this post.

In any case, American Thanksgiving comes in November, and the other clever theory out there is that the happiness chemicals in turkey (and overeating generally) make stock market people more likely to buy stocks.

Sunday, October 5, 2014

BI - investors fretting over junk bonds. Except junk bonds are the least junky that they've been in a decade, since they're so well funded. So in reality, these "investors" are really just monitoring flows to watch for risk-on/risk-off signals. Quote:

The spread has since widened by more than 100 basis points, according to Bank of America-Merrill Lynch data. Previous spikes of this magnitude have preceded pullbacks in the S&P 500, and the greater the selloff in high-yield debt, the worse the outcome was for stocks.

Yeah okay. In reality, the previous junk moves only happened because the entire market moved, in response to EZ fear and Cyprus fear and debt ceiling fear and so on. Hypercorrelation, remember that? And maybe the junk moves only preceded broad market moves because the people in junk know how grossly illiquid their market is, so they made sure to get out early.

In other words, all the junk spread is doing is telling you the market's risk-on/risk-off stance. When you compare it to the economic reality and the equity market's value ex-USD, you can calculate the irrationality of that stance.

Basically, junk bonds don't predict anything beyond piddled pink panties when you're in a bull market. And who the fuck thinks it's smart to jump in and out of a bull market anyway?

US exports are 30% higher than they were in 2007, and the forward outlook is better than it was in 2007 (when everyone realized everything was about to collapse). If US exports are 30% higher, why shouldn't the US market be 20% higher?